Report: Bahamas has highest VAT revenue ratio in LAC region
The Bahamas has the highest value-added tax (VAT) revenue ratio (VRR) in the Latin America and Caribbean Region (LAC) at 0.99, a according to a report entitled “Revenue Statistics in Latin America and the Caribbean for 1990-2017”, adding that this country also has one of the lowest VAT rates in the LAC region.
According to the report, The Bahamas’ VRR is .07 percentage points higher than Paraguay, which is next on the list.
The report explains that “Mexico and Colombia have the lowest VRR ratios, of 0.33 and 0.38 respectively.”
“The VRR measures the difference between the VAT revenue actually collected and what would theoretically be raised if VAT was applied at the standard rate to the entire potential tax base in a pure VAT regime and all revenue was collected,” the report notes.
The report continues: “The Bahamas introduced VAT in 2015 following international good practices: a broad-based VAT with a low standard rate, a limited number of exemptions and no reduced rates.”
The report explains that at a standard rate of 7.5 percent, The Bahamas’ VAT rate was one of the lowest in the LAC region. But even as the government raised the VAT rate to 12 percent in July last year, The Bahamas is still below the average VAT rate in the LAC region of 14.4 percent.
“VAT revenue in The Bahamas in 2017 was triple the amount raised in 2015 (in nominal terms), in large part due to new systems to collect tax revenues,” the report notes.
According to the report, VAT represented 5.2 percent of the countries gross domestic product, and 29.3 percent of total tax revenue in 2017.
Education: Florida International University, BS in Journalism
Latest posts by Chester Robards (see all)
- Bahamas records ‘strongest tourism numbers in history’ - January 24, 2020
- High demand making SBDC’s current model unsustainable - January 24, 2020
- Minnis: Time to rethink building codes enforcement - January 23, 2020